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Best Cashback Credit Cards in India
Cashback credit cards offer not only simplicity but also direct benefits. That's why they are becoming exponentially popular among the masses.
With a cashback credit card, you earn a percentage back every time you spend money, be it on shopping, utilities or fuel. This effectively lets you buy things at a "discount". If you are looking for a way to save money while spending on everyday items like groceries, fuel, or even travel, then using a cashback credit card is a good way to do so.
Whether you're shopping online, dining out, or paying bills, using the best cashback credit cards can significantly boost your savings. But how do they work, and which is the highest cashback credit card in India? Let's understand the reality of cashback credit cards, how they work, and why you should consider getting one.
Table of Contents
- What Are Cashback Credit Cards?
- How Do Cashback Credit Cards Work?
- Benefits of Using Cashback Credit Cards
- Why Choose a Cashback Credit Card?
- Factors to Consider When Choosing a Cashback Credit Card
- How to Apply for a Cashback Credit Card
What Are Cashback Credit Cards?
These credit cards allow you to earn back a part of the money you spend in the form of cash rewards. For example, let's say that your credit card offers a 1% cashback reward. Then, depending on the terms and conditions of your credit card, you can earn a cashback of Rs. 100 on spending Rs. 10,000. This cashback can be:
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Credited to your credit card balance
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Transferred to your bank account
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Used for other rewards like gift vouchers
The best thing about cashback credit cards is their simplicity. Unlike travel or loyalty points, which can be confusing and difficult to redeem, cashback is easy and uncomplex. You make a purchase, and you get real money back, often directly into your bank account.
Now, you must be wondering, "How do cashback credit cards work"? Let's answer that question:
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Earning cashback: Remember that you only earn cashback on every “eligible” purchase you make with your credit card. The amount you earn is typically a fixed percentage of the total money you spend. This can range from 0.5% to 5% or more, depending on the card and the category of the purchase (such as groceries, online shopping, or dining).
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Types of cashback: Some cards offer a flat rate on all purchases, while others provide higher rates on specific categories. For example, a card might give 5% cashback on dining, 2% on groceries, and 1% on all other purchases. The more you spend in these higher cashback categories, the more money you earn back.
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Redeeming cashback: Some cards credit your cashback directly to your card balance, lowering the amount you owe (reducing your credit card bill). Whereas, some transfer the cashback to your bank account or let you use it to buy gift vouchers.
Cashback credit cards make it easy to earn rewards without jumping through hoops, unlike other reward programs that require tracking points and redemption deadlines.
Benefits of Using Cashback Credit Cards
Cashback credit cards can help you save money and get more value from your spending:
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With cashback credit cards, every purchase you make earns you a small percentage back. Over time, this can add up to big savings or allow you to get more for your money.
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Unlike reward points or miles, cashback is real money that can be used however you choose. This flexibility is one of the most significant advantages of cashback over other reward programs.
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Some reward programs require you to convert points into flights, merchandise, or other benefits, which can be complicated and time-consuming. With cashback credit cards, you simply earn money and redeem it quickly with minimal effort.
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Many cashback credit cards offer higher cashback rates for specific categories like groceries, fuel, or online shopping. For instance, a card may offer 5% cashback on online purchases but only 1% on other types of spending. By focusing on your highest-spending categories, you can maximise your cashback rewards.
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Reward points or miles may be restricted to specific products or services. Cashback credit cards, on the other hand, give you complete freedom. You can spend it as you like— whether on reducing your bill, purchasing anything you want, or simply saving it for future use.
There are even cashback credit cards with no annual fee. These can ensure that you get the most out of your credit card without worrying about maintenance costs. With so many advantages, it's no wonder that cashback credit cards are a favourite among spenders. But why choose them over other types of reward cards? Let's take a closer look.
Why Choose a Cashback Credit Card?
While reward points and air miles have their appeal, cashback credit cards stand out for their simplicity and practicality. They directly benefit your wallet, making them perfect for people who value real, tangible savings.
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Direct savings: Every rupee you spend with a cashback credit card brings real savings. For instance, if you spend Rs. 1 lakh annually and earn 2% cashback, you save Rs. 2,000. This is money you can use immediately without having to wait for statement cycles.
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Easy to use: Unlike travel or rewards points that may require effort to redeem, cashback is straightforward. It's either automatically credited to your account or redeemed with minimal hassle.
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Ideal for daily expenses: The best cashback credit cards reward common spending categories like groceries, online shopping, or fuel. This makes them especially beneficial for everyday users who want to save while maintaining their current spending habits.
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Options for everyone: Whether you're looking for the highest cashback credit card or a cashback credit card with no annual fee, there's an option for every type of spender.
Choosing the right card is the next big step. But what should you look for when selecting the best cashback credit card for your needs? Let's dive into the key factors.
Factors to Consider When Choosing a Cashback Credit Card
When it comes to selecting the best cashback credit card for your needs, several factors should be kept in mind. Here are the key things to consider:
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Cashback rates: Some cards offer a flat cashback rate on all purchases, while others offer higher rates for specific categories, such as online shopping, fuel, or dining. Look for cards that offer competitive cashback rates, especially for categories where you spend the most.
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Annual fees: Some cashback credit cards come with an annual fee that can range from Rs. 500 to Rs. 3,000 or more. Check the card's annual fee and weigh it against potential savings. If your cashback earnings don't justify the fee, consider cashback credit cards with no annual fee.
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Bonus offers: Best cashback credit cards offer bonus cashback or introductory offers. For instance, during festive seasons or special promotions, some cards may provide extra cashback on specific categories or transactions. These bonuses can be a great way to boost your cashback earnings.
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Spending limits: Some cashback cards come with spending caps, meaning that the cashback rate applies only up to a certain amount of spending. For example, a card may offer 5% cashback on groceries but only up to Rs. 5,000 in spending per month. It's important to check these caps to ensure you're getting the maximum cashback possible.
Once you've evaluated your options and chosen the perfect card, the next step is applying for the credit card.
How to Apply for a Cashback Credit Card
Applying for a cashback credit card is easy and can be done online or at a bank branch. Here's a simple guide on how:
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Research: Start by comparing different cashback credit cards. You can use online credit card comparison websites like Finology Select to compare the features of various cards, including cashback rates, annual fees, and additional benefits.
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Check eligibility: Before applying, make sure you meet the eligibility requirements for the card you want. This usually includes having a good credit score (above 750) and providing proof of income. Some cards may have specific eligibility criteria, so it's a good idea to check before applying.
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Documentation: Collect the required documents, such as:
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Identity proof (Aadhaar, passport, voter ID)
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Address proof (utility bills, rent agreement)
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Income proof (salary slips, bank statements, IT return)
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Submit the application: You can apply online by filling out the application form on the bank's website. Alternatively, you can apply at the bank branch. Make sure all the information is accurate and complete before submitting your application.
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Wait for approval: Once you submit the application, the bank will verify your details and assess your eligibility. This process can take a few days. If approved, you'll receive your cashback credit card in the mail.
Cashback credit cards offer an easy way to save money while making everyday purchases. With their simple reward system, flexibility, and straightforward redemption process, they're a great choice for anyone looking to maximise their spending power. By choosing the right card based on cashback rates, annual fees, and redemption options, you can enjoy the benefits of cashback rewards and get more value from your regular spending.
